Harley Settles Screamin’ Eagle Tuner Suit Without ConcedingBy and
Motorcycle maker violated Clean Air Act, U.S. complaint says
Company agrees to settlement but disputes EPA. allegations
Harley-Davidson Inc. will pay $15 million to end a U.S. lawsuit accusing the iconic motorcycle maker of selling performance-enhancing engine tuners the government said were illegal emission-control defeat devices.
In a settlement announced Thursday, Harley also said it would stop selling and buy back and destroy its “Screamin’ Eagle” Pro Super Tuners. But Harley disputed the government’s claim that by selling its tuner through its dealer network, it enabled dealers and customers to tamper with motorcycles used on public roads. The Milwaukee-based company said they were meant for off-road and closed course competition, and that it did nothing wrong by selling them.
Still, the company known by its ticker symbol HOG sold almost 325,000 of the Pro Super Tuners from 2008 to 2015, and about 15,000 electronic fuel injection race tuners. They caused motorcycles to emit more pollution than the company had certified to the U.S. Environmental Protection Agency, according to a civil complaint filed by the Justice Department.
“Given Harley-Davidson’s prominence in the industry, this is a very significant step toward our goal of stopping the sale of illegal aftermarket defeat devices that cause harmful pollution on our roads and in our communities,” said Assistant Attorney General John C. Cruden, in a statement.
The allegations of wrongdoing trail Volkswagen AG’s nearly $15 billion settlement of civil litigation after the German automaker was found to have rigged diesel engine vehicles to appear compliant to emissions testing equipment even as they emitted substantially more pollutants than allowed under ordinary driving circumstances.
"What the government is doing is they’re catching up to what the industry is doing and they’re saying that ‘We’re not going to tolerate it anymore. We’re going to hit you with big penalties,’" said Clarence Ditlow, president of the Center of Auto Safety Inc. “These tuners where you can increase the performance of a motorcycle are very commonplace.”
Harley was also accused of selling more 12,000 bikes that were not covered by EPA certificates of conformity between 2006 and 2008.
While agreeing to pay a $12 million penalty, spend $3 million more on air pollution mitigation and sell only Clean Air Act-compliant devices, the company denied the deal was tantamount to an admission of liability.
Government Affairs Director Ed Moreland said in a statement that the deal was “a good faith compromise with the EPA on areas of law we interpret differently.”
Ditlow said a provision in the settlement discourages owners from using the modifications by terminating their warranty if they do.
Shares fell almost 8 percent on news of the lawsuit before rebounding. They closed down 1.7 percent in New York trading.
The case is U.S. v. Harley-Davidson Inc., 16-cv-1687, U.S. District Court, District of Columbia (Washington).
(An earlier version of this story was corrected to change headline.)
— With assistance by John Lippert